You may have heard the news about Compania Anonima Nacional Telefonos de Venezuela ( VNT). The short version is that Venezuelan President Hugo Chavez is threatening to nationalize the company.As a result, shares of VNT dropped more than 10% on Monday and were off by more than 27% on Tuesday. This article will not be a dissection of Venezuelan politics, but is about the portfolio-construction aspect of this type of event, which is a death blow, or potential death blow, to a theme you thought would work. First, I believe this episode helps to debunk one myth. Often, people who talk about foreign investing assign some measure of extra safety to a stock by virtue of its listing on the NYSE. It is true that there is more paperwork required to list there, but the notion that a company is somehow immune from disaster is not a good bet. There are tens of thousands of foreign companies to invest in, and the chance that they will fail or get news like VNT is the same, regardless of where these stocks list. You no doubt recall the demise of Yukos and Mikhail Khodorkovsky. Yukos was not NYSE-listed, but I am quite certain that if Khodorkovsky was running OAO Tatneft, which was listed until recently, and had been for years, it and not Yukos would have been taken out. If you invest in emerging markets via individual stocks or single-country funds, you may be taking on the risk that something crazy could happen. This risk taken is not necessarily a bad thing, but anyone investing in these countries needs to understand the risk they are exposed to and the steps to take to mitigate that risk. By far the simplest thing one can do is to not buy too much into a theme no matter how great an idea it seems. I guarantee there are investors (both professional and do-it-yourselfers) that have learned the hard way that they have too much in VNT. For emerging-market stocks like this, I tend to start out with a 2% weight and then trim back if it goes up a lot. The person who bought VNT last week at $20 with a 2% portfolio-weighting is simply having a bad day. They have not set their portfolio back two years by virtue of a lopsided bet gone bad.